42
economy
Taking a More Proactive Approach to the Economy State and business stakeholders need to consolidate their efforts to secure, reinforce and fully utilise all the benefits that Cyprus offers as a financial and professional business centre, says Michael Antoniades, Chairman, KPMG in Cyprus.
How would you describe the present state of the Cyprus Economy? Now on a path of solid growth, as acknowledged by the major credit rating agencies in recent years, the economy needs to maintain this positive growth. The major challenges include the reduction of NPEs in the banking sector and the need to speed up structural reforms in the public sector in order to simplify and facilitate foreign investment. The successful introduction of the National Health Scheme will also play an important role in the development of the economy in 2019. What has actually changed in the real economy the past 5 years? The real economy has experienced – but managed to adapt swiftly to – constant disruptions and reforms to the local and international economic environment. These were mainly caused by enhanced international regulation on tax, exchange of information and AML. Organisations acknowledge nowadays that emerging compliance requirements demand that increased control procedures and systems be utilised in order to monitor and improve the quality of services or products offered. Foreign investment in Cyprus continues to be a major source of national income. On the one hand, companies without substance are not an option, and on the other hand, the strategic location of Cyprus offers a unique opportunity to multinational corporations for the establishment of a regional office. The latter enables coordination of operations between the Far
ACCOUNTANCY CYPRUS
East in the morning to the West in the afternoon and, in addition, offers passporting options for operations within the European Union. One of the major catalysts that cannot be ignored is technology, which has disrupted the real economy and influenced the way services are offered to clients. I believe that technology lies at the forefront of future developments and plays a key role in organisations’ efforts to enhance their service offering. In terms of professional services, I strongly believe that the introduction of technology will definitely increase the efficiency and quality of service offered to businesses and to society in general.
Cyprus offers a unique opportunity to multinational corporations for the establishment of a regional office
In addition, the real economy is experiencing an evolution of service offerings in all major industries, due to Artificial Intelligence, Data & Analytics, Cybersecurity and Fintech. I believe that these capabilities will enhance
public satisfaction levels and, consequently, the customer experience. Do you believe that Cypriot businesses have been strengthened and improved by the influence of the many international companies that have set up in Cyprus? I believe so, yes, both directly and indirectly. We have seen many international companies choosing Cyprus in order to set up a presence for a number of reasons. These companies not only bring their expertise, their collaboration networks and their best practices with them, but they also seek cooperation with Cypriot businesses. These synergies appear to be successful, having brought about a renewed boost in confidence, an improved economic climate, and good prospects in the real estate, investment fund, shipping, construction, tourism and energy sectors. There is a lot of foreign investment in which the local business world has been involved, including marinas (Paralimni Marina), the banking sector (Bank of Cyprus and Hellenic Bank have foreign shareholders and American funds), the pharmaceutical sector (such as the investment made in Remedica), the energy sector (hydrocarbons in our Exclusive Economic Zone), shopping malls and the tourism sector (several hotels are being renovated and new ones are being built by foreign investors). Do you have any specific proposals that could make Cyprus an even more attractive location for funds and their management?
